The Economic Power of Gender Equality

Editor’s Note: This post is part of the blog series, “Her Goals: Our Future,” which highlights the connections between girls and women and the Sustainable Development Goals. Guest blogger views expressed here do not necessarily reflect the views of the UN Foundation.

I wish you all could meet Gloria. She is the reason why I get up and feel full of energy and hope in the mornings.

Gloria lived in her small cottage in Maputo in Mozambique. She was dying from infections as well as being HIV positive and had no access to medication. Everybody had abandoned her. She wasn’t afraid of dying. Her only fear was what was going to happen to her children, already living on the streets of Maputo. How much pain, abuse, and hunger should they experience?

But Gloria is now a woman with the biggest smile and the deepest self-esteem I have ever seen. She got help with medicine and food and a micro-loan to start her own growing business. All her kids go to school.

She told me, “The medicine and food made me survive, but the job gave me my life back.”

The world needs to create more than 600 million jobs by 2020. Job creation is one of the most important factors in eradicating poverty and creating stability. Job creation and decent work is at the core of our mission as the Swedish Development Finance Institution.

2015 was a year of major progress regarding sustainable global development with important agreements. But there is still too little focus on job creation as an efficient way to eradicate poverty.

Employment represents the bridge between economic development and poverty reduction – the availability of more and more productive jobs in the formal sector is key to improved living conditions.

Over 200 million people worldwide are unemployed. Unemployment particularly affects women and young people. Women are to a large extent employed within the informal sector. 9 out of 10 jobs in developing countries are created in the private sector, one new job creates 7-25 other jobs, and every person who gets a job will be able to support up to 5 persons.

For Swedfund, achieving gender equality is two-fold – it is a prerequisite for the sustainable development of the world we all want to see, but it is also means increased profitability in our portfolio companies.

You have probably heard it before, but let me repeat. Advancing women’s equality can add $12 trillion USD to global growth according to a McKinsey report from 2015.

Gender equality makes our companies more profitable and sustainable. Profitable companies can continue to invest in their business and in their employees. As we see it, gender equality is fundamental for driving profitability, it creates better decision-making, and also spurs innovation.And that is our main reason to work so hard for gender diversity and invest in in sectors that employ women, like the textile industry in Ethiopia or the health care sector.

The textile industry, with a clear majority of female employees, is a really interesting and promising area. And it shows how important it is with partnership and the right business partners.

We have together with the H&M, the Swedish multinational retail-clothing company, started a project to create and develop a top class textile industry in Ethiopia. We cooperate both with industrial partners and one of the worlds leading fashion brand for clothes, which ensures us the power to build a responsible industry with both high social and environmental standards and a healthy business for every stakeholder. For Ethiopia this will be a strong factor for job growth in an important industry. And if we succeed, this partnership project has an even greater leverage than our ordinary model.

I think and hope that it will be a best in class example and benchmark for the entire textile industry throughout the world, which we all know needs improvements. Leverage on the leverage in my mind.

We believe that what gets measured gets done. So we measure adherence to ILO Core Conventions and Basic terms of Employment, and the proportion of women in our portfolio companies, on management levels, and in the Board of directors.

But, we do not only measure – we work proactively in our role as an investor and owner. Promoting gender equality is part of our value creation process. And it is not only crucial but also a demand that we are building companies with gender as a part of its DNA and a factor for better business in every investment.

In the beginning of 2015, Swedfund launched the pilot project Women4Growth, a talent program where a group of women from two selected portfolio companies – Java House and Deacon’s – were empowered to identify the challenges they face to take on more responsibility and suggest changes that would enable them to overcome the barriers.

Amazing and concrete results have already come from the program with participants being promoted during the year, implementation of a training center, late night transportation for safe travel home for their employees, and additional leadership training. We hope for more.

In April this year, we launched the second Women4Growth talent program in Addis Ababa with Radisson BLU Addis Ababa, in which Swedfund is an owner. The intention is to continue pursuing the Women4Growth talent program in the other hotels that we have invested. The program shows that Swedfund as an investor can initiate change that leads to increased gender equality. There is a saying, “Where the money flows, the change goes.” In partnership with our portfolio companies, we can achieve real change for women employed.

Going forward job creation will continue to be one of our top priorities, but also making sure that women employed in our portfolio companies have the same opportunities and are empowered to reach their full potential and to reach management positions enabling them to play a greater role in developing our portfolio companies. This way our portfolio companies will become more profitable and we and our portfolio companies contribute to realize Sustainable Development Goal 5 and Sustainable Development Goal 8.

By Anna Ryott, Managing Director and Chief Executive Officer of Swedfund and member of the United Nations Foundation Global Entrepreneurs Council